HomeStore Lost $1.5B in 2001
The company attributed $960 million of the losses to one-time charges and restructuring.
"These filings resolve our historical accounting issues," said Lew Belote, Homestore's CFO in a statement. "These results are not indicative of current or future trends."
The company has been embroiled in an internal audit into the way its accountants booked ad and software sales revenue since December.
Homestore announced in February that because of accounting errors it overstated advertising revenue from January to September 2001 by $76 million to $82 million. It also said that 2000 revenue was $181.3 million, not the $230 million it previously reported.
In related news, Homestore announced yesterday it has completed the sale of its consumer credit division ConsumerInfo.com to Experian for $130 million in cash.
The company announced the deal on March 19, but continuity-marketing services firm MemberWorks Inc. sued to block the sale.
A federal court ruled last week that the sale of ConsumerInfo.com to Experian could go forward. However, the court also said part of the $130 million in cash it receives from the sale must be held in a trust while Homestore.com sorts out its legal difficulties.
Homestore.com acquired ConsumerInfo.com in August 2001 as part of its acquisition of iPlace, which at the time was majority owned by MemberWorks. In that deal, MemberWorks received $36 million in Homestore.com stock, which was then valued at $22 per share. But when Homestore.com's shares fell to nearly $2 per share recently, MemberWorks filed a securities fraud lawsuit to prevent the sale of ConsumerInfo.com.
In ruling that the sale of ConsumerInfo.com could go forward, Judge Janet Arterton of the U.S. District Court in Connecticut said Homestore.com must put $58 million of the $130 million in trust to cover any possible judgments against Homestore.com in connection with its financial problems. The $58 million is subject to future adjustment, she said.
Homestore is seeking a reduction of the trust